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Borden v. Rose, et al., Docket No. 361-10-05 Bncv (Wesley, J., Dec. 20, 2005) 

[The text of this Vermont trial court opinion is unofficial. It has been reformatted from the 

original. The accuracy of the text and the accompanying data included in the Vermont trial court 

opinion database is not guaranteed.]

STATE OF VERMONT BENNINGTON SUPERIOR COURT 

BENNINGTON COUNTY, SS. DOCKET NO. 361-10-05 Bncv 

JANE BORDEN (f/k/a Rose) ) 

) 

 VS. ) 

) 

JOHN ROSE, JULIUS ) 

ROSENWALD, & B.S. 

KRIMPETT, LLC

ORDER RE MOTION TO DISMISS

Introduction - Plaintiff's complaint sounds in tort but it arises from 

circumstances that were previously the subject of litigation in the Bennington Family 

Court. She claims damages for fraud and unjust enrichment, and invokes equity for the 

imposition of a constructive trust on the real estate formerly occupied as a marital home 

by herself and Defendant John Rose, her ex-husband. She asserts this claim 

notwithstanding the fact that each party's equity of redemption has been extinguished 

by a foreclosure judgment, and the property has been purchased by Defendants 

Rosenwald and Krimpett. Defendants have moved to dismiss for failure to state a 

claim, principally relying on the argument that any justiciable issue is vested solely 

within the Family Court's jurisdiction. As discussed below, the Court expresses grave 

doubts that the Superior Court has subject matter jurisdiction over any of the claims 

asserted against Defendant Rose. Furthermore, although technically vested with 
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jurisdiction over the claims against the other defendants, the Court questions whether 

the facts as plead are sufficient to sustain the causes of action alleged. However, 

inasmuch as the Court=s reasoning expands upon any of the arguments in the 

memoranda and requires certain inferences that might be described as beyond the 

pleadings as presently framed, the Court invokes the provision of V.R.C.P. 12(b) 

appropriate to such circumstances, deferring a definitive ruling until Aall parties shall be 

given a reasonable opportunity to present all material made pertinent to such a motion 

b Rule 56". Nonetheless, the Court writes presently at some length in an effort to 

apprise the parties of its concerns regarding the claims based on the record made thus 

far, thus affording an opportunity to bolster the record as contemplated by V.R.C.P.(e) 

and to supply additional legal authorities addressing the issues set forth below. 

 Factual Background - Taking all well-plead facts as true, Defendant Rose 

resided in the former marital home in Pownal after he and Plaintiff separated and 

throughout their divorce proceedings. He remained responsible for the mortgage 

payments. At the time the parties were negotiating a final stipulation, Defendant Rose 

"made affirmative representations that the mortgage payments had been re-negotiated, 

a payment plan had been agreed upon between him and Inter-State Federal 

Savings...and that the entire legal action was in abeyance." Complaint at &10. 

Nevertheless, as he was aware, Defendant Rose did not make a "repayment 

agreement" nor was the foreclosure action ever in abeyance. Plaintiff claims to have 

relied on these false representations as to the status of the foreclosure matter when 

she entered into a final stipulation for a divorce decree. By the terms of that decree, 

Defendant Rose was awarded title to the marital home, subject to a provision for 
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dividing any equity at the time the parties youngest child reaches 18 or graduates from 

high school. The portion of the decree related to property settlement recites as to the 

foreclosure proceedings: 

The matter is currently in abeyance. Should judgment be entered in the 

said complaint or any complaint for foreclosure the property shall be 

immediately listed for sale with Hoisington Realty or any other reputable 

realtor as agree upon by the parties at a price set by the Realtor and any 

offer within 5% of said listing must be accepted by the parties. If the 

property is sold as the result of a foreclosure judgment, Defendant, Mr. 

Rose shall be solely responsible for all fees associated with the 

foreclosure resulting from his failure to pay on the mortgage. 

Notwithstanding the above, Mr. Rose is solely responsible for and shall 

hold Ms. Rose harmless from any and all expenses related to the marital 

residence since the date of separation on or about February 5, 2001. 

Such expenses may include, but are not limited to, taxes , principal, 

interest on the mortgage payment. 

On June 4, 2002 Inter-State obtained a judgment by default in the mortgage 

proceedings. The Court infers from the pleadings that Plaintiff was unaware of this fact 

at the time of the divorce in November, 2002, notwithstanding the recitation in the 

decree that there was a foreclosure proceeding pending. On the present state of the 

pleadings, however, the Court does not construe the complaint as alleging that 

Defendant Rose did any act, fraudulently or otherwise, that prevented Plaintiff from 

becoming aware of this matter of public record. The complaint is likewise silent as to 

whether either party invoked the provisions in the divorce decree which specified a 

procedure for attempting to effectuate a sale in the event of foreclosure - an event 

which in fact had already occurred at the time of the divorce decree. Nevertheless, if 

such efforts were made they were unavailing. The six month period of redemption 

expired shortly after the divorce was final without the equity being redeemed by 

payment of the amount established by the foreclosure accounting, and Inter-State took 
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title to the property on December 20, 2002. 

 The allegations as to the other defendants are spare. On March 3, 2003, 

Defendant B.S.Krimpett, LLC purchased the property from Inter-State for the sum of 

$68,639.60, "believed to be the amount of the payoff of the loan." Complaint at & 19. 

Krimpett is a business entity of unknown origin believed to be closely associated with 

Defendant Rosenwald. Defendants Rosenwald and Rose are familiar with one another. 

 Defendant Rose continues to reside at the property and pay rent. On the present state 

of the pleadings, the Court does not consider it a reasonable inference in the absence 

of explicit allegations to such effect that the other defendants acted in furtherance of 

any claimed conspiracy at any time prior to Inter-State=s acquisition of the subject 

property. 

Discussion 

a) Procedural History and Legal Context - Defendants Rosenwald and 

Krimpett were first to file their motion to dismiss, a two page document that recites the 

statutory authority for Family Court jurisdiction, 4 V.S.A.'454, observes that all Plaintiff's 

claims spring originally from the Family Court stipulation and decree, and asserts 

without further discussion that subject matter jurisdiction is plainly absent. Defendants 

do not address the fact that the claims against them are conspiracy to defraud, or that 

they were not parties to the Family Court proceedings, nor suggest how these claims 

could have been brought in Family Court. Shortly after Rosenwald and Krimpett sought 

dismissal, Defendant Rose filed a similar request incorporating the earlier arguments by 

reference with no additional briefing. 

Plaintiff opposed the motion to dismiss claiming that all her claims "against all 
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Defendants are unique and separate ...from any matters related to the Final Order for 

Divorce". She cites Demgard v. Demgard 173 Vt.526 (2001) and Slansky v. Slansky, 

150 Vt. 438 (1988) for the proposition that certain causes of action between former 

spouses will support separate claims in Superior Court, even if they arose during the 

marriage and could also have been relevant to claims in the divorce proceedings. 

Defendants Krimpett and Rosenwald respond that the circumstances here are far more 

analogous to Tuthope v. Riehle, 167 Vt. 174 (1997) in which the dismissal of a Superior 

Court suit claiming fraudulent inducement during the negotiation of a final divorce 

stipulation was upheld as an impermissible collateral attack on the divorce decree; 

(although Defendant Rose has made no additional filings beyond his initial adoption of 

the arguments of the other defendants, the Court treats all arguments raised by 

Defendants Rosenwald and Krimpett as applicable to Rose's motion to dismiss). 

Plaintiff has not addressed how Tuthope is distinguishable from her claim. As to the 

complaint against Defendant Rose, the Court does not believe that it can be on the 

record presently established. 

In Slansky, the parties had been divorced by a stipulated decree that vested 

each with the property then in that person=s name. Although no specific mention was 

made of the health insurance policy, it was undisputed that at the time of the divorce 

Mr. Slansky knew that the policy had been changed into Ms. Slansky=s name alone 

excluding him from any coverage. Nonetheless, only a few months after the divorce 

was final, Mr. Slansky brought a Superior Court action for fraudulent conversion 

alleging that he had provided the funds for the policy prior to the separation expecting 

that it would name the entire family as insureds, that Ms. Slansky put the policy in her 
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name alone without his knowledge, and that as a result he had been unable to obtain 

insurance coverage for a health condition that subsequently developed. The Superior 

Court granted defendant=s motion for summary judgment concluding that the issue was 

res judicata since it could have been raised in the divorce action. While the Supreme 

Court acknowledged that Athe dispute concerning the insurance policy was clearly at 

issue during the parties= negotiations@ in the divorce action, and that Ait might have been 

a more prudent course to have expressly reserved the issue in the property distribution 

agreement@, it nevertheless refused to extend res judicata to bar Aa unique claim 

sounding in tort that is separate and distinct from the divorce decree.@ Id. 150 Vt. at 

441-42. 

 By its analysis in Tuthope, the Court distinguished Slansky. Tuthope was 

decided after the creation of the Family Court during which the Legislature delimited the 

Superior Court=s jurisdiction so as to preclude it from considering actions cognizable in 

the Family Court. 

 4 V.S.A.'113. Thus, the Court upheld dismissal of Ms. Tudhope=s Superior Court 

complaint against Mr. Riehle, her ex-husband, by which she alleged that he had 

procured her consent to a stipulated divorce decree by unconscionable means including 

fraud, deceit and duress. The Court ruled that a settlement agreement incorporated 

into a divorce decree Abecomes a part of the judgment of the court and is assailable 

only through a motion to set aside the judgment.@ Id. 167 Vt at 177. The Court rejected 

the argument that the plaintiff=s attempt at a collateral attack on the divorce was

covered by the principles discussed in Slansky. Looking to the Asubstance of the 

complaint@ rather than the Aprecise terminology@ of the tort label, the Court concluded 
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that Tudhope was Aattempting to relitigate the property distribution agreement that the 

family court adopted rather than asserting a unique claim separate and distinct from the 

divorce decree@. Id. at 179-80. 

The parameters of what constitutes a Aunique claim@ sufficient to avoid the 

preclusive effect of a divorce decree are further refined by Demgard. In that matter, Mr. 

Demgard filed a Superior Court claim seeking contribution from his ex-wife for payments 

he had made on a promissory note the parties had executed prior to their divorce. The 

divorce decree had issued after a contested hearing, but made no specific disposition of 

the parties marital debts and omitted any mention of the promissory note. Although Ms. 

Demgard argued that issues regarding the note had been the subject of a portion of a 

memorandum filed prior to the divorce trial, the Supreme Court found nothing in the 

record to support the conclusion that the Family Court had ever been presented with 

evidence as to the debt so as to incorporate consideration of it into the division of the 

marital estate. Furthermore, the Court noted that under 4 V.S.A.'453(a) AVermont 

statutes governing divorce proceedings do not obligate the family court to allocate 

responsibility for marital debt absent the parties= invocation of the court=s equitable 

jurisdiction to do so.@ Id. 173 Vt. at 528. Tuthope was distinguished because it involved 

a collateral attack on a property stipulation incorporated into the divorce decree by 

consent of the parties, whereas the claim for equitable contribution between the 

Demgards was not required to have been presented to the Family Court which, in fact, 

had never considered it during the trial on the merits. By this reasoning, the Court found 

it Aa unique and separate claim from the property division in the final divorce judgment@, 

and thus Acognizable in superior court@. Id. 
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b) Claims against Defendant Rose - Notwithstanding her conclusory insistence 

to the contrary, Plaintiff=s claim against her ex-husband does not appear to be Aunique 

and separate@ from the divorce judgment but rather constitutes a direct attack on the 

consent decree, seemingly indistinguishable from the situation in Tuthope. As 

Defendants note, Plaintiff=s complaint specifically alleges that ADefendant Rose 

fraudulently induced the Family Court into signing a Final Order of Divorce@, Complaint 

at &16, the exact claim rejected in Tuthope as an impermissible collateral attack. 

Indeed, absent the further development of facts to support the contention, the Court 

would find it hard to accept Plaintiff=s argument that because her ex-husband Ano longer 

retains an ownership interest in the subject property, the family court would have little or 

no mechanism available to it to adjudicate the issues raise in Plaintiff=s Complaint and 

the relief requested@. Rather, as in Tuthope, the conclusion would appear inescapable 

that Plaintiff is bound by the settlement she made, and that any means of relief ought to 

have been either a petition to enforce the settlement agreement regarding the rights 

provided relative to the foreclosure proceeding, or a timely motion to set aside the 

consent decree. 

Significantly, the decree discloses no absolute reliance on the recitation that the 

foreclosure action was Ain abeyance@, the core element of Plaintiff=s claim for 

misrepresentation. Although the stipulation and decree charge Defendant Rose with 

responsibility for the mortgage payments, they make no explicit provision as to how the 

foreclosure action must be resolved. Instead, the stipulation expressly contemplated the 

prospect that judgment could Abe entered in the said complaint or any complaint 

foreclosure@, making particular provision for a method by which the property could be 
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Asold as the result of a foreclosure judgment.@ Given the contingencies contemplated by 

the divorce decree regarding the pending foreclosure action, Plaintiff must be charged 

with the duty of taking reasonable steps to protect her inchoate interest in any equity in 

the marital home, which plainly could not materialize except for the resolution of the 

foreclosure. Assuming as Plaintiff alleges that the balance to satisfy the mortgage was 

almost $70,000, the prospect of having to sell the home to save any potential equity was 

palpable at the time of the final divorce decree. Yet, for all that appears from the 

complaint, Plaintiff apparently claims reliance on the asserted state of Aabeyance@ for 

having remained uninformed as to the entry of default in the foreclosure, the 

establishment of the period of redemption scheduled to expire within a matter of weeks, 

and the subsequent expiration of that period and transfer of title to the mortgagee. 

Each of the parties was represented by counsel at the time of the divorce 

(including Plaintiff=s representation by her current attorney). The foreclosure action had 

been pending since before April 2002 at the time the divorce was settled in November 

2002. From its attempts to parse the limited history presented by the pleadings, the 

Court is left with the disquieting prospect that at the time of the divorce decree neither 

Plaintiff, nor counsel, was aware of the default judgment more than five months earlier 

that had triggered the running of the redemption period set to expire less than a month 

hence. If that is the case, however, claiming that Defendant misrepresented the nature 

of any state of Aabeyance@in the foreclosure proceedings does not make out actionable 

misrepresentation, as the Court presently understands the law. See,Winton v. Johnson 

& Dix Fuel Corp. 147 Vt. 236, 241(1986)(misrepresentations as to a matter of law are 

not actionable Awhere it is clear... from facts about the relationship of the parties that 
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reliance should only follow an independent inquiry@). As a party to the action whose 

existence she acknowledged in the divorce stipulation, Plaintiff and her counsel must be 

charged with knowledge of its status which would have been disclosed by a simple 

inquiry to the court clerk. In any event, since no express provision was made in the 

decree for how the parties expected the foreclosure claim would be resolved, except by 

the eventual need to sell the house, Plaintiff surely must have been advised that her 

potential rights under the divorce decree would require vigilance regarding the 

foreclosure suit. 

Under the circumstances presented, it is unclear whether there were any 

remedies in either the divorce proceedings or the foreclosure proceedings by which 

Plaintiff could have forestalled the loss of the house. However, by the exercise of 

reasonable prudence either before or after the divorce decree, she might have enforced 

the remedy specifically bargained for in the divorce settlement - sale of the house - or, to 

the extent she was able to demonstrate other prejudice flowing from claimed 

misrepresentation, grounds for seeking to have the divorce decree vacated. That she 

allowed the time for exercising her potential remedies to lapse without asserting them 

does not strengthen her present claim of for a Aunique and separate@ action. Tuthope, 

167 Vt. at 178 (superior court action not justified by expiration of period for seeking postjudgment relief in divorce proceeding since such limits are consistent with the need for 

finality of judgments). 

c) Claims against Defendants Krimpett and Rosenwald - By the foregoing 

analysis, the Court presently believes that the fundamental claim that Defendant Rose=s 

misrepresentations regarding the status of the foreclosure action tainted the divorce 
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decree is res judicata as regards the complaint against him. However, contrary to the 

briefing of the other defendants, reliance on Tuthope alone is insufficient to afford the 

basis for dismissal of the claims against them. As that opinion notes, Athe type of relief 

available in a tort action is not available in a divorce action.@ Id, 167 Vt. at 179. Thus, 

since the claim for conspiracy to defraud could not have been joined with the original 

divorce, the decree in that action cannot have preclusive effect with respect to the 

complaints against the other defendants. Nonetheless, although not deprived of subject 

matter jurisdiction, this Court doubts that Plaintiff has plead sufficient facts to state a 

cause of action on which relief could be granted as to the other defendants. 

Plaintiff alleges in Count I that Defendants Rosenwald and Krimpett Aconspired 

to de-fraud Plaintiff of her rightful portion of the marital home@. In Count II, she alleges 

that those other defendants Awill be unjustly enriched should they receive the entire 

portion of the value of the subject property@, and on that basis she invokes by her Count 

III an equitable entitlement to the remedy of a constructive trust. As previously noted, 

the facts already discussed with respect to Plaintiff=s complaint against Defendant Rose 

do not presently permit the inference that he engaged in any act of conspiracy with the 

other defendants prior to the judicial transfer of title to the property to Inter-State. Thus, 

the allegations supporting Plaintiff=s additional claims against the other defendants are 

decidedly meager. They are limited to: i) Defendant Krimpett purchased the property 

from the judgment holder in the foreclosure action for an amount equal to what would 

have been necessary to redeem, presumably well below fair market value; ii) Krimpett is 

closely associated with Defendant Rosenwald, who is familiar with Defendant Rose; 

iii) Defendant Rose never moved from the property, and now pays rent to Krimpett 
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and/or Rosewald as agent for Krimpett. These facts are plainly insufficient to establish 

either a conspiracy to defraud or unjust enrichment. 

The parties have yet to brief the elements of an action for civil conspiracy, but 

the Court=s research discloses scant jurisprudence from the opinions of the Vermont 

Supreme Court; see, e.g. Schwartz v. Frankenhoff 169 Vt. 287 (1999)(no court will 

accept conclusory allegations of a conspiracy, without more, as sufficient to establish 

personal jurisdiction over an alleged member of the conspiracy), State v. Heritage Realty 

of Vermont 137 Vt. 425 (1979)(state=s evidence insufficient to show anything more than 

similar prices reached independently which would not support the agreement elemental 

to an illegal price-fixing conspiracy, but summary judgment was premature in light of 

State=s petition for additional discovery). As described in 16 Am Jur2d ,Conspiracy '50, 

the definition of a civil conspiracy is Aa combination of two or more persons by some 

concerted action to accomplish some criminal or unlawful purpose@, with Athe essence of 

civil conspiracy@ being a claim for damages. But there Acan be no conspiracy where the 

acts complained of, and the means employed in doing the acts, are lawful.@ As to 

elements, a civil conspiracy Arequires an object to be accomplished, a meeting of minds 

on the object or course of action, one or more overt acts, and damages as a proximate 

result thereof.@ Id., '51. 

In this case as plead, there are neither factual allegations, nor reasonable 

inferences to be drawn from them, sufficient to establish any claim of an unlawful 

agreement, or acts taken in furtherance of it. Plaintiff does not allege that the defendants 

plotted in concert at the time of the divorce to deprive her of any hope of realizing her 

share of the equity in the home. In any event, no such agreement could have 
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succeeded had Plaintiff invoked her right to compel a sale of the house, the free 

exercise of which was unimpeded by the acts of any of the defendants as far as can be 

inferred from the allegations of the complaint. Furthermore, even assuming Defendant 

Rose=s misstatement about the nature of the foreclosure Ain abeyance@ had been 

actionable, the link between such misrepresentation and the later acts of the other 

defendants are too attenuated to demonstrate any resulting damage to Plaintiff=s 

interests. As already discussed, such proximate cause as against Defendant Rose is 

dubious, even had it been properly raised in the Family Court, because Plaintiff failed to 

resort to remedies available to her under the divorce decree. As to the other 

defendants, the linkage is so indistinct as to disappear on the current state of the record. 

 Simply put, no nefarious purpose can reasonably be inferred from the allegations 

against Defendants Krimpett and Rosenwald. They bought a property from a foreclosing 

creditor at a bargain price, in itself an unnoteworthy event. They then made an 

unspecified arrangement with the prior owner to continue to occupy the premises 

presumably involving rent. Each of these events can be explained in terms of 

commercially reasonable behavior, and without additional allegations that plainly frame 

them as unlawful, there can be no conspiracy. 

By similar reasoning, Plaintiff has failed to allege facts showing unlawful actions 

by either Defendant Krimpett or Rosenwald that proximately caused damage to Plaintiff 

by way of unjustly enriching those defendants. The allegations of the complaint show no 

more than that Defendants realized a possible bargain by purchasing the property from 

a foreclosing creditor typically anxious to eliminate a losing investment from its portfolio. 

In this regard, it must be noted that long-established authority supports Vermont=s 
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tradition of strict foreclosure, though in circumstances such as this one it can produce 

the harsh consequence of the liquidation of significant equity lost to mortgagors who fail 

to redeem. See, Aldrich v.Lincoln Land Corp., 130 Vt. 372 (1972)(the right of redemption 

is the device that removes a foreclosure from the condemnation of a forfeiture), 

Dieffenbach v. Attorney General of Vermont, 604 F.2d 187 (2nd Cir, 1977)(upholding the 

constitutionality if Vermont=s strict foreclosure statute). 

 Based on the foregoing, it is hereby ORDERED: The Court will defer further ruling on 

Defendants= Motions to Dismiss pending an opportunity to develop the record pursuant 

to Rule 56 in light of the discussion in this opinion. The parties shall consult with respect 

to an appropriate discovery schedule and file a stipulation with the Court no later than 

January 6, 2006, which shall specify a deadline for the completion of all written discovery 

and depositions. Supplemental memoranda shall be filed within 20 days after the close 

of discovery. 

DATED December 20, 2005, at Bennington, Vermont. 

 

John P. Wesley 

Presiding Judge